A dream begins with a handful of bucks


A FEW YEARS AGO, Khady Ding of Senegal was typical of many impoverished mothers in the developing world. She struggled to feed four children, aided by help from relief agencies when they stopped in her village.

Then in 1990, with financial and technical support from Catholic Relief Services, people in Khady's village established a community bank to provide small loans, previously unavailable to these poor villagers. With the equivalent of $40, Khady purchased livestock. By raising and selling healthy cows, chicken and sheep, she now has steady income, food for her children and no need for help from relief agencies.

In Bangladesh, Nurjahan had experienced little but abandonment and poverty. Abandoned by her parents as an infant and, later, by her husband, she had never earned more than about $37 in a single year and owned no land. She supported herself and her son by cooking for the family that had raised her.

Five years after borrowing from a similar program, the Grameen Bank, she was the proud owner of two goats, a pregnant cow, 10 hens and two-thirds of an acre of land. Her annual income is $250, above the national average. Equally impressive, her son has reached eighth grade, in a country where fewer than half of all children reach grade five.

"Microcredit" programs

Those stories of the successes possible through "microcredit" programs -- small loans made available to the very poor -- have long been familiar in the developing world. But the principles and practices of microcredit have just as much promise here at home, particularly in an era when the government safety nets are disappearing for people considered poor credit risks by traditional lending institutions.

Marian Fletcher is the proud owner of Let's Go Party, a business that can plan a party, decorate the room, cater the food and, now that Ms. Fletcher is a certified travel agent, book honeymoon reservations. Since she launched her business in late 1995, her income has tripled, and she now provides part-time work for seven other people. "I love it, I love it," she says of business and her busy, rewarding life.

Ms. Fletcher's success would not be possible without her talent, energy and enthusiasm for what she does. But those qualities, as essential as they are, would not be enough. As many as 90 percent of new businesses fail in any given year.

Microcredit lending programs do more than just provide funds to budding entrepreneurs. In Ms. Fletcher's case, one big factor for her success was the business training and support she received from Women Entrepreneurs of Baltimore. Organized by the city's Commission for Women, the group aims to give women, especially those below or near poverty level, intensive training in the skills needed to start and run a successful small business.

Since 1991, more than 250 women have finished its 12-week training program. Three times a week, classes gather to write and polish a comprehensive business plan and two-year financial projections.

According to Amanda Crook Zinn, Women Entrepreneurs of Baltimore's CEO, 70 percent of the graduates have started businesses, and 97 percent of those businesses are still in operation.

In addition to the initial training, a mentoring program pairs new entrepreneurs with successful women business owners. It also offers a lending and savings program and coaches women on developing a financial strategy for their businesses.

Programs like Women Entrepreneurs of Baltimore, the Grameen Bank and the village bank in Senegal may be small-scale, but they produce big results in the lives of people most lending institutions would not consider creditworthy. Every day, eager entrepreneurs like Marian Fletcher and Nurjahan and Khady Ding are proving those traditional assumptions wrong.

Microcredit is a powerful idea, not just for poor people in the world's poorest countries, but also for people in this country who have everything they need for success except business training and access to credit.

In early February, representatives from microcredit programs around the world will gather in Washington for a "microcredit summit" to trade ideas and plot strategy for a global movement to extend credit for self-employment to 100 million of the world's poorest families, especially the women of those families, by the year 2005.

That could do more to alleviate poverty and human suffering than billions of dollars funneled through traditional forms of foreign aid. Given half a chance -- and access to credit -- millions of poor people are eager and able to succeed.

Sara Engram is deputy editorial-page editor of The Sun.

Pub Date: 1/19/97

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